By taking Jeremy Hunt’s NI cuts and ruling out other rises, Labour tried to out-Tory the Tories. And made a bad situation worse
Keir Starmer and Rachel Reeves have only themselves to blame for the mess they are in over tax. The key moment was not the defenestration of their welfare bill or the uprising over pensioners’ winter fuel payments. The die was cast more than a year earlier.
In January 2024, the then chancellor Jeremy Hunt implemented a cut in employee national insurance contributions. Four months later he announced a further reduction from 10% to 8% and even hinted that he was considering abolishing employee contributions altogether. It was the mother of all election bribes, costing the exchequer about £10bn a year. It was also entirely cynical, offered in the absolute confidence that the Tories would not be in office long enough to grapple with the consequences. Had they by any chance won the election, he would have had to recoup the tax revenue forgone by either tax increases or by further swingeing cuts to the public sector.
Chris Mullin is a former Labour minister and the author of four volumes of widely acclaimed diaries
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